Before approving your home loan, Malaysian banks commission an independent valuation to determine the property's market value. If the valuation comes in below your agreed purchase price, you must make up the shortfall in cash. Understanding this process prevents costly surprises.
Why Valuation Matters for Your Loan
Malaysian banks lend based on the lower of purchase price or valuation. If you agree to buy a property for RM500,000 but the bank's valuer assesses it at RM460,000, the bank lends 90% of RM460,000 = RM414,000 โ not RM450,000. You must find the extra RM36,000 in cash.
How the Valuation Process Works
- After your loan application is submitted, the bank appoints an independent registered valuer (LPPEH-registered)
- The valuer inspects the property and compares with recent comparable sales (comparables) in the area
- Valuation report issued in 3โ7 working days
- Bank uses the valuation to determine loan quantum
Valuation Fees
| Property Value | Valuation Fee |
|---|---|
| Up to RM100,000 | 0.25% (min RM300) |
| RM100,001โRM2,000,000 | 0.20% |
| RM2,000,001โRM7,000,000 | 0.167% |
| Above RM7,000,000 | Negotiable (min 0.125%) |
For a RM500,000 property, expect to pay approximately RM1,000 in valuation fees.
What If the Valuation Is Too Low?
- Request a review: You can ask the bank to instruct a second valuation, especially if you have evidence of recent comparable sales at higher prices
- Negotiate the purchase price: Use the low valuation as leverage to renegotiate with the seller
- Make up the shortfall in cash: Sometimes unavoidable in a rising market
- Try another bank: Different banks may use different valuers and get different results
Our editorial team specialises in Malaysian personal finance โ covering loans, taxation, insurance, EPF, and Islamic finance. Every article is fact-checked against Bank Negara Malaysia (BNM), LHDN, and major Malaysian bank publications. We reference our calculators (which use industry-standard formulas) to ensure consistency between our written content and tools. Learn more about our methodology โ